The Schwann cell (SC) is a cell type of choice for cell transplantation therapies that aim to restore function in the injured CNS and PNS. Work in animal models has consistently shown that SCs reduce the size of the cavities that form after spinal cord injury; promote axon regeneration across the lesion site and myelinate regenerating axons, thereby improving functional recovery. In July 2012, the FDA approved a Phase I clinical trial to test the safety of autologous adult nerve-derived human SC transplantation in patients suffering from spinal cord injury. The feasibility to use primary SCs in cell therapy relies on th availability of cell culture methods rendering high numbers of transplantation quality purified SCs from peripheral nerve biopsies. An accurate assessment of the identity and function of the human SC product is essential to determine the potential therapeutic value of the cells. Indeed, the assessment of cell function prior to transplantation is a regulatory requirement for product release in later phases of clinical testing. Even though an extensive literature exists that report studies on rodent SCs, studies on human SCs are scarce. This is at least in part due to the poor performance of cultured human SCs in standard functional assays that were originally designed for rodent cells. This project seeks to overcome technical barriers in the development of in vitro assays to evaluate the biological activity of human SCs. Because SC identity and function are inextricably intertwined, we propose to begin addressing this challenge by developing simple analytical methods to evaluate the differentiating potential of SCs to become myelinating cells by the identification of differentiation markers before and after administration of cAMP, an instructing signal for differentiation (Aim 1). Because ensheathment and myelination of axons are perhaps the two most critical determinants for SC function in vitro and in vivo, we also propose to develop myelinating co-cultures of human SCs and neurons by implementing rational modifications to current protocols affecting both the SC and the neuronal components of the co-culture system (Aim 2). Identifying the most important cellular characteristics of in vitro expanded SCs relevant to their differentiating potential into myelin-forming cells will allow us to develop and implement reliable assays that assess the therapeutic value of the cells. If successful, co-cultures systems that allow for a quantification of myelin formation in vitro can serve as a direct measure of SC potency.